Steven Pearlstein, in his June 8 column, “Will ending quarterly earnings guidance free CEOs to think long term? ” [news], praised Business Roundtable for announcing support for public companies moving away from the expectation of providing quarterly earnings per share guidance. Mr. Pearlstein was off the mark, however, in asserting that “the source of most of what has gone wrong with American capitalism” can be traced to a decision by Business Roundtable to “declare maximizing value for shareholders as the sole purpose of a corporation.” That is not the position of Business Roundtable today, nor has it been in past decades.
As Jamie Dimon, chairman and CEO of JPMorgan Chase and chairman of Business Roundtable, explained in his 2018 letter to shareholders: “Building shareholder value is the primary goal of a business, but it is simply not possible to do well if a company is not properly treating and serving its customers, training and motivating its employees, and being a good citizen in the community. If they are all done well, it enhances shareholder value.”
There is no conflict between enhancing shareholder value and serving the needs of employees, customers and communities. These objectives are not mutually exclusive. Mr. Pearlstein’s binary depiction of this issue misrepresents how most corporations truly operate, increase value and create economic opportunity throughout our country.
Joshua Bolten, Washington
The writer is president and chief executive of Business Roundtable, an association of chief executive officers of leading U.S. companies.